Red Deerians will likely face a higher property tax increase this spring because the provincial government is approving its largest education property tax increase in 20 years, City of Red Deer manager Craig Curtis said on Monday.
Curtis said he was disappointed and surprised to learn that the province was increasing its education tax portion gathered throughout Alberta by $107 million over 2011. In 2011, the increase in the provincial education requisition was just over $35 million — a 5.7 per cent increase over the 2010 amount.
“They’re going to draw eight per cent more dollars from us, but exactly how that equates into a tax increase (we’re not sure),” said Curtis. “Obviously, it’s going to pull up the overall tax increase if they don’t change it — it’s a major download to municipalities.”
Cal Dallas, Red Deer South MLA and minister of Intergovernmental, International and Aboriginal Relations, confirmed this is the largest education property tax increase in 20 years.
But Dallas said there is a reason for the increase.
“This is the first time in 20 years that the change includes assessment and growth at the same time,” said Dallas. “So in the prior 19 years, the province either decreased or froze education property tax rate.”
The tax rate is exactly the same as it was, he added.
The difference is that any changes in the value of an existing property or new taxable properties are captured in the educational assessment, said Dallas.
Last month, city council passed a municipal property tax increase of 4.3 per cent. The city’s portion amounts to two-thirds of the tax bill. The remaining one-third comes from the province.
The provincial education tax increase of $107 million represents an average tax increase of 6.4 per cent for all properties in the province.
“I think it is important that municipalities challenge the province to find other sources to fund this increase,” said Curtis.
The Alberta provincial education property tax revenue is forecast at $1.98 billion in 2012-13.
“I hope the province recognizes what they’ve done here and try to offset the increase — to keep with the idea of no tax increase,” said Curtis.
Alberta Premier Alison Redford released a provincial budget last week that indicated no tax increase.
“The total education provincial funding budget is in the range of $7 billion, of which just under $2 billion is actually collected in education taxes to pay for that K-12 education,” said Dallas. “Of that $1.98 billion, there is an increase of $107 million (over last year).”
Lawrence Lee, chair of Red Deer Public School District, anticipates the next district budget will be $110 million. And with this increase in the education property tax portion, the school district may get $3 million more, Lee said.
“It’s a very small amount to operate our schools,” he said.
ltester@www.reddeeradvocate.com